Changes coming to comptroller power in wake of indictment

In wake of ex-official's indictment in Ohio, mayor orders switch to competitive bidding

Former City Comptroller Amer Ahmad has pleaded not guilty to federal charges in an alleged kickback scheme in Ohio. (Heather Charles, Chicago Tribune)

Mayor Rahm Emanuel is moving to take back the broad authority he gave one of the city's top financial aides to buy insurance in the wake of his former comptroller's federal indictment in an alleged kickback scheme tied to his old job in Ohio.

Shortly after taking office, Emanuel pushed a measure through the City Council allowing then-Comptroller Amer Ahmad to buy insurance without putting the business out to bid. Now the administration will obtain coverage through a competitive bidding process overseen by the Department of Procurement Services, mayoral spokeswoman Sarah Hamilton said Wednesday.

Although Hamilton said the mayor has ordered the switch, it's unclear whether Emanuel will move to change the city ordinance that gave Ahmad the power in the first place. The Emanuel administration also sought to pin on predecessor Richard M. Daley the idea of giving the comptroller more power over insurance purchases.

"It was proposed in March 2011 as a way to clarify the comptroller's duties as a financial agent for the city," Hamilton said. Emanuel took office in May 2011.

Ahmad abruptly resigned his post at City Hall in late July and weeks later was indicted by federal prosecutors in Ohio for a role in an alleged kickback scheme. Ahmad and another suspect have pleaded not guilty. Two others have pleaded guilty and are expected to cooperate with the government in the prosecution of Ahmad.

A preliminary review of Ahmad's work at City Hall turned up no wrongdoing, city officials have said. A more comprehensive audit is underway and will review Ahmad's insurance purchases, Hamilton said.

"We don't have any evidence that there was anything improper with these procurements," Hamilton said of more than $2 million in insurance purchased for city airports, festival and excess liability coverage. Nevertheless, the change was being made "as a precautionary measure," she said.

In November 2011, six months after Emanuel took office, a city ordinance was changed to give the comptroller "the power to purchase, directly or through an insurance broker that he engages, and subject to the approval of the budget director, insurance for the city to cover risks in one or more categories."

Under Ahmad, the city hired James Raussen as managing deputy comptroller at an annual salary of $127,332 to oversee the purchase of insurance, a job he still holds at Emanuel's City Hall. Raussen is a former Republican state lawmaker in Ohio, where Ahmad was once the deputy treasurer.

Raussen, who had worked in the insurance industry, represented suburban Cincinnati from 2003 through 2008, when he resigned and then-Ohio Gov. Ted Strickland appointed him to the newly created post of state director of insurance and financial development.

At City Hall, Ahmad used his insurance-buying authority to pay up to $2.7 million to Cincinnati-based USI Midwest for insurance brokerage services, most of it for policies at Midway and O'Hare International airports, city records show.

At the time the contracts were awarded, USI's Chicago lobbyist was Christopher Colwell, who had contributed $1,150 to Raussen's state campaign fund between 2005 and 2008, according to Chicago lobbying data and Ohio campaign finance reports. The USI contracts and connections between Raussen and Colwell were first reported by the Sun-Times.

Weeks before taking office in May 2011, Emanuel hired Ahmad, in part based on the recommendation of Lois Scott, the mayor's incoming chief financial officer.

Scott has had close business ties involving her former private financial firm, City Hall and key figures in the Ohio federal bribery probe, the Tribune has reported.

Ahmad awarded a contract that led to $165,000 in bond fees for Scott's firm, Scott Balice Strategies, when he served as Ohio's deputy treasurer. After Scott started as Emanuel's chief financial officer, she selected a firm that employed Ahmad's onetime boss, former Ohio Treasurer Kevin Boyce, for hundreds of thousands of dollars in city bond work.

Ahmad had a role on both ends, clearing the way for Scott's work in Ohio while also meeting with Boyce as he sought business in Chicago. Boyce recommended Ahmad for the Chicago comptroller job despite knowing his former aide had been under federal investigation, the Tribune has reported.